TABLE 13–11 CAMELS Component Weights CAMELS Component Weight C 25% A 20 M 25 E 10 10 S 10 Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov
TABLE 13–11 CAMELS Component Weights CAMELS Component Weight C 25% A 20 M 25 E 10 10 S 10 Source: FDIC, Federal Register, May 20, 2016. www.fdic.gov
Chapter5: Operating Activities: Purchases And Cash Payments
Section: Chapter Questions
Problem 1.10C
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Two depository institutions have composite CAMELS ratings of 1 or 2 and are "well capitalized." Thus, each institution falls into the FDIC Risk Category I deposit insurance assessment scheme. Further, the institutions have the following financial ratios and CAMELS ratings: Use Table 13–11.
Institution A | Institution B | |||||
Tier I leverage ratio (%) | 8.80 | 7.93 | ||||
Net income before taxes/risk-weighted assets (%) | 2.33 | 1.95 | ||||
Nonperforming loans and leases/gross assets (%) | 0.53 | 0.68 | ||||
Other real estate owned/gross assets (%) | 0.15 | 0.45 | ||||
Brokered deposits/total assets (%) | 3.75 | 1.05 | ||||
One year asset growth | 7.35 | 4.65 | ||||
Loans as a Percentage of Total Assets: | ||||||
Construction & Development | 0.00 | 0.00 | ||||
Commercial & Industrial | 18.36 | 11.40 | ||||
Leases | 2.05 | 1.75 | ||||
Other Consumer | 18.85 | 18.55 | ||||
Loans to Foreign Government | 0.30 | 0.30 | ||||
Real Estate Loans Residual | 0.00 | 0.00 | ||||
Multifamily Residential | 0.95 | 0.65 | ||||
Nonfarm Nonresidential | 0.00 | 0.00 | ||||
1–4 Family Residential | 38.40 | 36.34 | ||||
Loans to Depository Banks | 2.70 | 0.95 | ||||
Agricultural Real Estate | 1.30 | 4.05 | ||||
Agricultural | 0.40 | 7.20 | ||||
CAMELS components: | ||||||
C | 2 | 2 | ||||
A | 2 | 3 | ||||
M | 1 | 2 | ||||
E | 2 | 2 | ||||
L | 1 | 3 | ||||
S | 2 | 1 | ||||
The DIF reserve ratio is currently 1.30 percent. Calculate the initial deposit insurance assessment rate for each institution.
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